Subject: File No. S7-17-11
From: Edward Crane

Per your request to comment on the proposed exclusion of the value of a persons primary residence from the calculation of a natural persons net worth under rule 205-3:

I do not think you should do this. It is not required by the Dodd-Frank act for qualified clients" and definitely should not be done. Whether or not an investor chooses to own a home or rent has no relevance to an individuals financial experience. This is unfair to home owners and should not be done. Please do not do this.

Per your request to comment on this proposed transition provision:

Please do "grandfather" in existing clients and allow advisers to continue to provide advisory services under performance fee arrangements that were permitted under the rule in effect at the time the contract was entered into. Don't make them continuously reassess whether they meet new standards. This is critical as not interupt existing investors current portfolio's unaturally. So please allow this exception.

Per your request to comment on the transition period or delayed compliance date that would be appropriate for any revised thresholds that you issue by order, or for any rule amendments that you adopt:

Please allow at least 1 to 2 years for existing financial advisors to convert to this new standard. Also, please scale in any increase slowly over time. Please don't raise the limit all at one time from $1.5M to $2.0M. Instead scale this change in slowly over a multi-year period. Please only raise the limit by at most $100,000 per year as this gives investors and financial advisors a reasonable amount of time to adjust without causing them unintended damage.

Finally, please note that adjusting the dollar amount tests in rule 205-3 would definitely impose very significant new costs on advisory clients or investment advisers.

Making this change too quickly will make it very difficult for investors who would now fall below the new $2.0M net worth rule to find good money managers as they likely will not be accepted by many because they will not be allowed to pay the performance fee. This gives an investor less choice and is a high cost for them.

Also, while this may not hurt large advisor firms, it will definitely hurt the very small firms. It significantly shrinks the amount of potential clients to draw from. This high cost is not what we need in the tough economic climate we are currently facing.

Please don't hurt small businesses. Please don't raise the limit from $1.5M to $2.0M so quickly. Do it more slowly. Please allow existing advisors at least 2 years to react to this major change. Please grandfather in all existing investors to be exempt from this major change. Please create a new exception where someone with a high level of education (bachelors degree or beyond) can pay the performance fee if they choose.

More choice not less is good for investors. Please avoid making such a big rule change so quickly.